Hong Kong developers suffer in market’s biggest sell-off since mid-2015 as new security law revives protests, capital flight concerns

Shares of city’s office and shopping centre landlords dived by more than 7 per cent, among the biggest losers in the sell-off

A new legislation proposed by Beijing to curb activities aimed at toppling the central government is fuelling political risks

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People gather at the Times Square shopping mall during an anti-government protest in Causeway Bay, on Hong Kong’s Chief Executive Carrie Lam Cheng Yuet-ngor's birthday. A new security law proposed by Beijing is fueling concerns about more unrest in the city and stock losses. Photo: Sam Tsang

Published: 1:03pm, 22 May 2020Updated: 5:20pm, 22 May 2020

Hong Kong property developers slumped, bearing the brunt of Hong Kong’s stock market sell-off amid heightened concerns Beijing’s proposed national security law for the city could stoke social unrest and erode its appeal as a financial hub.

The city’s biggest landlords of office towers and shopping malls slumped, dragging the broader market down by the most in nearly five years.

Sun Hung Kai Properties, Hong Kong’s largest developer and owner of commercial complexes including the iconic IFC towers in Central, plummeted 7.8 per cent to HK$90.75. Link Reit, which owns 126 shopping centres and offices in Hong Kong, dived 10.2 per cent to HK$60.95. Swire Properties, owner of major offices in Admiralty and Quarry Bay, declined 10.2 per cent to HK$18.18.

The benchmark Hang Seng Index tumbled 5.6 per cent, its biggest daily percentage drop since July 2015. A sub-index tracking property stocks slid 7.8 per cent, the worst among industry sub-gauges.

“Investors were afraid property prices will collapse and capital would flow out of the Hong Kong market,” said Kevin Leung, executive director of investment strategy at Haitong International Securities in Hong Kong. “Concerns about a new wave of protests were obviously factored in as well.”

Chinese legislators on Thursday evening revealed they will discuss a proposed law tailor-made for Hong Kong to ban all seditious activities aimed at toppling the central government.